MINUTES
SENATE COMMITTEE ON NOMINATIONS
Monday, March 21, 2005
2:00 p.m. or upon adjournment
Capitol Extension, Room E1.016
*****
Pursuant to a notice posted in accordance with Senate Rule
11.18, a public hearing of the Senate Committee on Nominations
was held on Monday, March 21, 2005, in the Capitol Extension,
Room E1.016, at Austin, Texas.
*****
MEMBERS PRESENT: MEMBERS ABSENT:
Senator Jon Lindsay Senator Gonzalo
Barrientos
Senator Bob Deuell
Senator Kevin Eltife
Senator Mike Jackson
Senator Eddie Lucio, Jr.
Senator Jane Nelson
*****
The chair called the meeting to order at 3:45 p.m. There being a
quorum present, the following business was transacted:
The following member arrived after the roll was called: Senator
Nelson at 4:00 p.m.
At 3:46 p.m., Senator Eltife moved adoption of the minutes from
the previous hearing; without objection, it was so ordered.
Chairman Lindsay announced that Senator Troy Fraser was unable
to attend today's hearing to introduce his constituent, John
Graham, Jr., a nominee to the Teacher Retirement System of Texas
Board of Trustees. Chairman Lindsay gave a brief introduction of
Graham saying that Senator Fraser urged the committee to pass
Mr. Graham.
The Chair recognized Vice-chairman Deuell to introduce John Mark
Henry, Ed.D. Henry recently became a constituent of Senator John
Whitmire, who was unable to attend the meeting. Whitmire asked
Deuell to perform the honors since Henry used to live in
Deuell's district.
Deuell also introduced Dory Wiley for Senator Carona who was
also unable to attend because of other duties.
Chairman Lindsay asked the nominees how long they had served on
the board; one a little less than a year , the other two had
served slightly over a year. Chairman Lindsay asked, first, if
they regarded the TRS as a healthy system and second, to give a
general overview. Henry said the TRS is in great shape, it is
91% funded-there is a projected shortfall in the future but
plenty of time left to correct. He added that they have an
excellent and very diverse staff and that, although he
personally did not have the same money background and experience
as the other two, he felt he provided the educational expertise
needed.
Wiley echoed the sentiments about the excellent staff and added
that he felt like there was nothing broke in the system, but
recognized that there are things that needed tweaking every now
and then.
Graham said that since he joined the Board, there has been a 9
and 1/2% annual rate of growth, and the system was expanding
into real estate. He did mention one big issue which is the cost
of healthcare.
The chair recognized Senator Lucio who referenced a letter
written to the editor of his hometown newspaper by Sylvia
Suarez, the legislative chair of TRS- Brownsville saying that
the TRS is short by $230 million in appropriations from the
state and if the state does not contribute more, retirees can
anticipate a 28.5% increase on September 1. Lucio asked for
comments from the nominees concerning the letter. Henry agreed
with the figures and described some ways to lessen the blow to
retirees by giving them an increase of 7% instead of 28%. Wiley
explained that when he said things were not broken, he was
referring to the investment side. He added that healthcare was
beyond the scope of the TRS and the legislature would have to
decide.
Chairman Lindsay asked about the real estate investments,
basically if there would be any more in land acquisitions.
Graham answered that they had hired consultants to develop a
plan that would be similar to private equity placements.
Chairman Lindsay asked what they were looking for, the answer
was diversification. The board felt that real estate was a good
way to diversify since it was countercyclical to the
stockmarket.
Chairman Lindsay recognized Deuell who asked the nominees if
they anticipated involvement in addressing the problem of
dramatically rising healthcare costs. Wiley said that they could
make a difference in how they administered healthcare costs,
adding that the TRS is a big system with big numbers. Deuell
asked if they had heard any complaints about the pharmacy
system, the nominees said not at the board level or school
level. Deuell said the prescription costs were responsible for
driving up most of the costs and gave an example of how MRI's
were being purchased by individual doctors to put in offices
instead of one MRI being used for an entire group or region.
Henry said that the biggest concern of this staff was
healthcare.
The chair recognized Senator Lucio who agreed with Deuell saying
that he took the issue at heart. Lucio stressed that health and
safety were the two main concerns of people in his district and
that there were people in his district that were dying because
they could not afford to live.
Chairman Lindsay recognized Senator Nelson who thanked the
nominees for their service, then asked if they saw any long term
solutions to the problems. Henry said healthcare was a national
problem that was much greater than the three of them but that
perhaps finding a way to combine retirees with active
participants would help. Wiley offered his two cents- he said
throwing money at the problem is not a good solution, the
situation is messed up and needs to be fixed. Graham added that
the problem of costly healthcare translates to all small
businesses as well, citing the example of his wife's
Fredericksburg business.
Chairman Lindsay asked for a motion to vote, Lucio so moved. At
4:08 p.m., by a vote of 6 ayes, 0 nays, and 1 absent, the
nominees to the Teacher Retirement System Board of Trustees
passed to the full Senate for confirmation.
Chairman Lindsay asked for a motion to vote on the non-appearing
nominees, Eltife so moved. At 4:09 p.m., by a vote of 6 ayes, 0
nays and 1 absent, nominees from the following entities were
recommended to the full Senate for confirmation: Texas Animal
Health Commission, Texas Credit Union Commission, Upper
Guadalupe River Authority, Guadalupe-Blanco River Authority
Board of Directors, Department of Information Resources, Texas
Board of Professional Land Surveyors, Texas Commission of
Licensing and Regulation, Upper Neches River Municipal Water
Authority Board of Directors, Texas Board of Physical Therapy
Examiners, Texas Real Estate Commission, Sabine River Authority
of Texas, Sulphur River Basin Authority Board of Directors,
Board of Tax Professional Examiners, and Texas Private Security
Board.
There being no further business, at 4:19 p.m. Senator Lindsay
moved that the Committee stand recessed subject to the call of
the chair. Without objection, it was so ordered.
_____________________________
Senator Jon Lindsay, Chair
_____________________________
Jazen Wood, Clerk
.